27/07/2026 Daily Reports
Gold prices moved higher on Monday as easing tensions in the Middle East triggered a sharp decline in oil prices, reducing immediate inflation concerns and improving sentiment toward precious metals. A weaker U.S. dollar also provided additional support by making dollar-denominated assets more attractive to overseas buyers. Reports suggesting a pause in hostilities between the United States and Iran helped drive oil prices more than 4% lower, prompting investors to reassess near-term inflation risks after months of energy-driven price pressures.
Market attention is now firmly focused on the upcoming Federal Reserve policy meeting, where interest rates are widely expected to remain unchanged. However, expectations for additional policy tightening later in the year continue to influence sentiment, as higher interest rates typically reduce the appeal of non-yielding assets such as gold. Meanwhile, the broader precious metals complex also strengthened, with silver, platinum, and palladium all posting solid gains as investors responded to the improving risk environment while continuing to monitor geopolitical developments and the outlook for monetary policy.
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This week, all eyes are on critical central bank decisions! Geopolitical developments in the Middle East and fluctuating energy prices continue to shape monetary policies. Here are the key expectations in the FX markets ahead of the Fed, ECB, and BoE:
- US Dollar (USD) – Seeking a “Safe Haven” Ahead of the Fed: The Fed is expected to keep rates on hold this Wednesday. However, Chair Kevin Warsh’s opposition to forward guidance and lingering geopolitical tensions make the dollar a strong shield against potential “hawkish” surprises. Despite short-term pullbacks in oil prices, the dollar’s strong momentum could persist unless a clear de-escalation path emerges.
- Euro (EUR) – Natural Gas Prices Keep the Pressure On: Although the EUR/USD pair bounced back above 1.140 with the drop in oil prices, this move seems somewhat optimistic. Natural gas (TTF) prices, Europe’s soft underbelly, are still hovering near recent highs, heavily pressuring the eurozone’s terms of trade. Furthermore, Friday’s upcoming inflation data is not expected to trigger aggressive hawkish repricing.
- British Pound (GBP) – BoE on Hold: Rates are expected to remain unchanged at Thursday’s Bank of England (BoE) meeting, likely with a 7-2 vote. With inflation expected to remain contained (peaking comfortably below 4%), the BoE is likely to stay on hold for the rest of the year. The possibility of a “dovish” repricing—dashing the market’s current tightening expectations—stands out as the clearest near-term downside risk for Sterling.
